By Standard Reporter

Kenya: The discovery of crude oil in Turkana has sparked renewed vigor in the Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) project.

Consequently the construction of a crude oil pipeline from Uganda to Turkana and finally to Lamu has now become very urgent as both countries lay plans to begin exporting the black gold.

The cabinet Secretary for Energy Davis Chirchir said last month that the pipeline tender will be finalized soon to commence the works.

To actualize this the government has set aside land for construction of a crude oil depot in Baragoni area, Lamu County. The depot and pipeline are now the priority area for the LAPSSET in view of the latest developments in Turkana Project.

International investors such as Toyota Tsusho are queuing up to build the depot and pipeline on Build Operate Transfer Basis (OTB).

Subsequently land around the area is appreciating rapidly. Investors are buying up large chunks of land in the knowledge that they stand to gain from the coming oil boom in the next few years. Capital appreciation of land, over the next few years, in the port and oil depot area could well be higher than anything Kenya has ever witnessed.

Like in the case of the Konza City and other areas targeted for capital investments, the moguls have bought huge chums of land.

“More and more land transactions have been reported in our offices in the last five Months”, said a senior Lamu County officer who is not authorized to speak to the media.

He says the main purchasers so far are international companies, individual Kenyan billionaires and liquid Sacco societies.

An acre of land is now retailing for between Sh. 4 million from Sh. 1.5 Million two years ago. Coast based real estate agents Badama Limited said some of their clients had called to enquire about possible investment opportunities at the Coast and specifically in Lamu.

“We have been tasked by some clients to get them clean land at Lamu ideal for purchase or long term lease. This LAPSSET thing will be a huge hit”, says Peter Itumo, the firms operations Director.

Itumo said the appreciation of land at Lamu reminds one of the Thika Super Highway land scramble which hit a crescendo when the project commenced in 2008.

“Before the Thika Super Highway construction began, one eighth of land was costing Sh. 500,000. Now they are being flogged at close to Sh.5million and we are still counting”, he says.

The same was the case at Kitengela, Isinya, all the way to Namanga before the launch of the Athi River- Namanga Road, he said.

The LAPSSET Corridor Project is a major Integrated, Transformative and Game-Changer infrastructure Project the Government has initiated and prepared under Vision 2030 Strategy Framework.

The project seeks to deliver a Prosperous middle income Kenya by the year 2030. Kenya is spearheading the development of Corridor Project to strengthen her position as a gateway and a transport and logistics hub to the East African sub-region and the Great Lakes region to facilitate trade, promote regional economic integration and interconnectivity between African countries.

Out of the seven LAPSSET Components, the Government of Kenya has put priority on the development of the First Three Berths and Associated Port Infrastructure which is expected to trigger development of the other components.

The LAPSSET Corridor Project covers over half of the country with a planned investment resource equivalent to half of Kenya’s Gross Domestic Product (GDP) for the core investment alone.

Conservative feasibility statistics show that the project will inject between 2 percent to 3 percent of GDP into the economy.

It is also estimated that contribution of the LAPSSET Corridor Project to the country’s economic growth could range 5 percent to 8 percent of GDP when generated and attracted investments finally come on board. This view is supported by the fact that new investments of the magnitude of LAPSSET Corridor Project in hitherto low developed areas usually yield higher growth figures.

The project will provide equity in development for the entire country in line with the Constitution and the Kenya Vision 2030.

It will enhance efficient, seamless inter-modalism in the country’s transport and logistics operations while the planned resort cities will resolve the current urban primacy scenario centered along the current Northern Corridor route from Mombasa – Nairobi – Malaba and Kisumu – Busia.

Overall, the development of the LAPSSET Corridor will create employment and reduce poverty in the country as well as improve accessibility and enhance socio-economic development of the northern part of the country.

A seamless interconnectivity will also be created within coastal counties, throughout the country and linkages to neighboring countries through the country’s roads, railway, ports, airports and telecommunications.

The project will strengthen Kenya’s regional Hub status in Eastern Africa as a result of the country being the originator of Trans boundary transport projects, special economic zones and Free Trade Areas.

The project will help the region create capacity in infrastructure industry from human, technological, financial and consumers in the country. Countries like

China, India, Malaysia, Brazil, Iran and Singapore among others have used this model to adapt technology and train their manpower while building capacity in their delivery institutions.

The project will help strengthen socio-economic base of Kenya by improving infrastructure as the key backbone of the Kenyan economy. Continued investment in infrastructure has seen the country recovering which resulted in a jumpstart from a marginal 1.6 to 2.6 and 5.5 per cent growth in 2010 and beyond.

The project will open up the pastoral regions particularly in the north of Kenya that will now be the next growth frontier for the entire economy as this will have made tremendous strides towards facilitating socio-economic development with the completion of these key infrastructure projects.

It will lead to increase in electric power generation through various energy initiatives such as green energy and clean energy to improve reliability in electric power supply to support faster rate of industrialization and inter country electricity supply such as the envisaged Kenya -Ethiopia electricity power agreement.

Last year, the Government tendered for 1000 megawatts coal fired plant in Lamu in order to add more power to the grid and sustaining growing investment opportunities there.

Conversely, this will facilitate attraction of increased private sector investment in infrastructure development and management in the country. Currently, there are a number of private sector interventions particularly in the energy, water and railway sub-sectors. More private sector investments are being explored in roads, railways, ports and water services.

This will help the region to establish efficient, reliable and sustainable infrastructure and accelerate creation of more employment in both specialized areas and labor thus reducing poverty levels in the country.